1. Field of the Invention
The present invention generally relates to financial transactions and more particularly to facilitating on-line financial transactions through an on-line payment provider.
2. Related Art
With the ever-increasing popularity of the Internet and of Internet commerce, both consumers and sellers are using the Internet to facilitate financial transactions between buyers and sellers. In on-line financial transactions, consumers may use third-party payment service providers to pay for products and services through electronic communications with online merchants over electronic networks, such as the Internet. The third-party payment providers provide an infra-structure, software, and services that enable member buyers and member sellers or merchants to make and receive payments. The payments may be credit card payments, electronic bank transfers, or other payment techniques offered by the third-party payment provider. One payment technique may be transferring money from an account held by the payment provider, as opposed to transferring credit from an outside credit card company or an outside financial institution or bank. Transferring money held in the payment provider account may be cheaper for a user because it avoids certain transaction fees or interest payments that may be incurred when transferring money or making a payment from an outside credit or banking institution.
One type of on-line transaction utilizing a third-party payment provider is classified ads, such as craigslist or Kijiji, in which sellers list goods and services for purchase through an on-line site. These listings are generally very basic, with just a brief written description of the item or service. Thus, when a potential buyer searches through the listings and finds an interesting item, the buyer may need additional information before committing to purchase the item. On the seller side, the seller may not want to spend time corresponding with the potential buyer because of various reasons, such as uncertainty in the actual interest of the buyer and financial ability of the buyer to pay for the item. As a result, the seller may be hesitant to spend additional time and effort for the potential buyer, such as providing him additional information, and the seller may be hesitant to commit to purchasing an item with only limited information. This may then lead to a potential transaction being canceled before it even starts.
Another problem with on-line purchasing is the possibility of a fraudulent message to a seller confirming a transfer of funds. For example, a seller may receive a fraudulent message on the seller's mobile device, informing him that funds have been transferred to his account. The seller, relying on this information, then releases the item to the “buyer,” only later to find out that no funds were actually transferred or deposited. The seller would then have given up the item, with no funds transferred and no way to contact the “buyer.”